What are TANS (Tax Anticipation Notes) and what is their function?
N.J.S.A 40A:4-64 allows municipalities to take out a TAN. Specifically, it states that “In any fiscal year, in anticipation of the collection of taxes for such year, whether levied or to be levied in such year, or in anticipation of other revenues for such year, any local unit may, by resolution, borrow money and issue its negotiable notes.” In simpler terms, it allows municipalities to receive tax revenue in advance of tax collection date(s). Basically, it equates to an advance on the revenue. This common practice allows municipalities to ensure that their cash flow is at sufficient levels to maintain government operations.
